Property Taxes on the Rise, Mayor’s Agenda Is Clear

Now that we have hit the halfway mark through Bill de Blasio’s first term as Mayor of New York City, we have learned a lot about him through successful and failed campaign promises. He has championed his political agenda around his massive affordable housing plan, however, he forgot about the people that actually provide the City’s largest affordable housing stock.

Since his Administration has taken the helm, it is no secret that Mayor de Blasio has continued his tenant-friendly agenda that began as a City Council Member and continued as Public Advocate. His self-appointed members of the Rent Guidelines Board over the past two years have carried out his campaign promise of a rent freeze and an unjustifiable 1 percent increase during his first year in office.

While Mayor de Blasio advocates for preserving affordable housing, he seems to be blind to the fact that property tax assessments for Class 2 properties continue to skyrocket. This year, the tentative assessment has increased nearly 11.7 percent after increasing 8.9 percent and 12.7 percent in 2014 and 2015 respectively during de Blasio’s tenure.

Property taxes have become the biggest expense for owners of multi-family rental properties, often accounting for up to 40 percent of building operating costs. Just 15 years ago, property taxes accounted for 18-23 percent of operating expenses. Real estate taxes have escalated sharply over the last 15 years and show no signs of abating.
If the Mayor plans on preserving over 120,000 units of existing affordable housing, how does he expect to do so when owners face the stranglehold of increasing property taxes? In January, Mayor de Blasio took his political agenda up to Albany once again where he had the audacity to ask the State for additional funding while the City is in the midst of a multi-billion dollar surplus, largely in part to property taxes.

The response of the State legislature is commended by the entire rental housing industry, calling on the Mayor to cap City property taxes while the City thrives financially. One of Mayor de Blasio’s primary concerns in his testimony was the State’s proposed cuts to the City’s Medicaid program. When the state Senate offered to restore these proposed cuts in exchange for a City property tax cap, the Mayor declined.

RSA has tried to get our message to resonate with Mayor de Blasio for over two years now, but it is clear that the voices of property owners are being ignored. It is simply not possible to preserve the existing affordable housing stock when owners are not granted reasonable rent increases and are slapped with ever-increasing property taxes. Owners simply cannot maintain and preserve their buildings without adequate funds needed to do so.
It is one thing to champion tenant-friendly needs, but truth be told, Mayor de Blasio will never fulfill his affordable housing promises without fair housing policies that benefit both the tenants and property owners.